2006-09-27 02:08:23 · 5 answers · asked by Joyce 1 in Business & Finance ➔ Investing
In a word yes, if share prices drop it's usually due to either reduced earnings or a reduction in anticipated earnings. If earnings have dropped, then profits tend to drop with them, leaving less money to share out in the form of dividends.
However sometimes the two are unconnected and dividends are not affected, but only rarely.
2006-09-27 02:12:51 · answer #1 · answered by nkellingley@btinternet.com 5 · 0⤊ 1⤋
No -- and yes.
If the company has committed to a dividend payout, then a drop in price does not usually change that committment. However, a permanent drop in price will happen when a company is not performing well. If the company is not performing well, then that will mean that the company will not be able to increase dividends very much in the following year.
Companies try hard not to let a good or bad performance in one year affect dividend payouts too much -- because the market will punish them for cutting back on dividends and because the market will expect any increae in dividends to be permanent.
2006-09-27 02:17:00 · answer #2 · answered by Ranto 7 · 1⤊ 0⤋
No... Dividends are determined by the board and are not impacted by changes in the share price...
The Divididend payout ratio goes up though because you can get the same dividend by paying less for the stock...
2006-09-27 02:16:44 · answer #3 · answered by Andy FF1,2,CrTr,4,5,6,7,8,9,10 5 · 1⤊ 0⤋
try these links hope u'll find it useful
http://www.lofinance.blogspot.com
good luck for your investments
2006-09-27 03:31:15 · answer #4 · answered by Axl Rose 2 · 0⤊ 0⤋
no
2006-09-27 07:50:04 · answer #5 · answered by vegas_iwish 5 · 0⤊ 0⤋